Governor Christie Whitman and Transportation Commissioner John J. Haley Jr. today announced that the State has reached an agreement with CSX Corporation and Norfolk Southern Corporation to protect freight and passenger rail service under the proposed merger with the Consolidated Rail Corporation (Conrail).

"New Jersey holds the position as one of the largest markets in the world and is a major hub of goods distribution for the nation. We also have one of the finest public transit systems serving a critical transportation corridor linking the Northeast. Throughout the talks my goal has been to ensure that both will continue to flourish under this merger proposal. I believe this merger will provide a final outcome that results in a competitive rail system that serves all of New Jersey’s freight customers and rail passengers," said Governor Whitman.

Since discussions on the acquisition of Conrail by the two transportation giants began last year, New Jersey has based its support of any merger agreement on five principles which address competition, access, accommodation of both freight and passenger operations, intermodal options and worker displacement.

"At the outset of the talks it was clear to everyone that the Conrail system is very important to the economic health of New Jersey. At the same time, it was patently evident that New Jersey is equally as important to the economic health of Conrail. After months of discussion we have now arrived at the point where we can stand behind CSX and Norfolk Southern’s plans to acquire Conrail knowing that we have fostered competitive access to all of our key markets, as well as assuring compatibility and safety of intercity, commuter and freight services for shared track," Haley said. "In fact, New Jersey becomes the only state in which 80 percent of its industry will have competitive access to two major rail freight carriers.

"This agreement represents a breakthrough in the relationship between the freight and passenger rail communities because it sets up a dynamic for coexistence. From this point on, technology to improve both safety and cost efficiency will be shared by freight and passenger rail services and applied to strengthen our entire rail network in the state," Haley continued.

"I would like to thank chairmen David Goode (Norfolk Southern) and John Snow (CSX) and their staffs for their diligence and good faith over the months as we hammered out language to this agreement. Clearly, their interests in seeing that this merger goes through are reflected in the time and attention they gave to our concerns," Haley added.

Highlights of the agreement include:

The ability of New Jersey’s 13 short line carriers to have competitive access with both CSX and Norfolk Southern.

Retention of current operating rules. Use of these operating rules assures that there are no operating conflicts between freight and commuter trains.

Installation of Automatic Train Control/Positive Train Stop on lines shared with NJ Transit. This ensures the freight carriers will operate with the same safety equipment on tracks shared with NJ Transit.

Construction of the Townley Avenue station (NJ Transit). The agreement assures NJ Transit ability to build a new station in Union County along the heavily traveled Raritan Valley line.

Protecting the opportunity for new passenger services. The railroads have agreed to work with the state to develop new passenger rail starts in recognition of New Jersey’s growing need for expanded public transit services.

Cooperation among all parties in the development of the South Jersey Light Rail Transit System. The railroads have agreed specifically to work with New Jersey as it advances the Trenton to Camden light rail project because the proposed passenger line will share right of way with freight service.

The CSX/Norfolk Southern proposal is now before the federal Surface Transportation Board. If approved, it will create two competing Class 1 railroads, each handling approximately 50 percent of all major rail freight east of the Mississippi River. It also introduces viable rail competition to the New Jersey market for the first time since Conrail was created by an act of the federal government in 1976.